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the big DIP

Several times today my online reading has brought me to Henrik Mårtensson’s Kallokain blog. Henrik has a great knack of taking concepts from lean manufacturing or the Theory of Constraints and creating worked examples to show how they play out in day-to-day software development.

Take for example what Henrik calls the DIP – design-in-process – the software development equivalent of inventory. DIP is any work that has been begun, but not yet shipped to end users.

An easy, and highly visible, way to measure DIP, is to make a Project Control Board. Use a whiteboard, or a large mylar sheet on a wall. Make a table with one column for each hand-off in your development process. […] At the start of each iteration, write sticky notes for each story (use case, feature description, or whatever you use). […] Whenever a developer begins to work on a new story, the developer moves the story from the stack of sticky notes to the first column in the table. The developer is then responsible for moving the story to a new column each time the story goes into a new phase of development. […] The sticky notes in the table are your DIP. Track it closely. If you have a process problem, you will soon see how sticky notes pile up at one of your process stages.

This fits with everything I’ve written about task boards, but Henrik then goes on to show how to calculate the current value of your DIP – ie. the investment you have made in the unshipped work on the board. In his worked example, a requirements change causes 20 story points worth of DIP to be scrapped; and as each story point costs 1,000 EUR to develop, the requirements change means we must write off 20,000 EUR of development costs.

It is worth noting that some of the 1,000 EUR per story point is “carrying costs” for the work that was scrapped. Just as manufacturing inventory costs money to store and move around, unshipped software (not to mention uncoded designs) has to be regularly read, searched, built and tested. It was there all the time, and we had to respect it and live with it. So it slowed us down; we had to step around it, and we would have tripped along more lightly if it had never been there. Looked at another way: with lower DIP inventory our cost per story point would be lower; equivalently, we could achieve higher throughput for the same expense.

(Of course, there are two obvious reactions to this write-off cost: make changes really difficult, or reduce inventories and cycle times so that DIP is always lower. Each has its sphere of applicability, I guess…)